Campingninja, a firm that has been backed by VisitScotland and ran 13 campsites during the London Olympics, had submitted an application to turn the grounds of Glasgow Hutchesons' Aloysians Rugby Club, Giffnock, into a site for up to 600 people in 250 tents who are volunteering, visiting or working in the city as part of the Games.
However, despite East Renfrewshire Council officers recommending the application was granted, four councillors on the authority's planning committee voted against it, with three in favour, after concerns were raised over security, parking issues and the impact on residents.
A petition registering "dismay" at "600 people camping on our doorstep" and demanding a series of conditions if the application was granted was signed by 57 residents in a single street. Due to the number of formal objections, citing issues, including a loss of privacy, noise and light pollution, the decision was left to councillors rather than officials.
Geoff Vaughan, managing director of Campingninja, which is already taking bookings for two similar sized sites at sports clubs at Pollok Park and Uddingston, said the decision would lead to increased pressure on affordable accommodation during the Commonwealth Games, with even budget hotel chains charging upwards of £250 per night compared to the £18 per night camping fee.
"We have spent many months with the planning department going through this, so it is clearly disappointing", he said. "The next step is to go down the appeal route.
"There are many elements to the application that we believe were clearly misunderstood. There was no amplified music, lighting aimed at residents or power generation. This was about as low impact and green as you can get.
"We do not want volunteers to drop out. This was mainly for people who were giving up two weeks of their time, the majority from elsewhere in Scotland, but also the rest of the UK and the Commonwealth.
"Glasgow Hutchesons' Aloysians is a community sports club that could have used the money to invest in things such as youth sports and provide a legacy to the Games. It would have been looking at upwards of £15,000 to £20,000, which is not to be sniffed at for pitches not in use at that time."
The company had submitted plans, supported by Giffnock Community Council, for the formation of a temporary campsite between July 19 and August 9, which would have been situated over two pitches, with campers making use of existing facilities such as showers at the clubhouse.
Papers submitted to councillors on the committee stated tickets had already been sold for the campsite before the application had been determined. However Campingninja said that was not the case.
In its decision notice, the council said the application had been refused because it was "contrary to the development plan", which states there should be no loss of leisure or recreation land in the area.
Stewart Miller, a Conservative member of the committee who voted against the application, said he had initially been enthusiastic about the proposals but became concerned when he learned more of the details.
He said: "This was totally against the development plan and would have set a precedent for anything coming up again. There was something not quite right about it."
A Glasgow 2014 spokeswoman said: "We are working to ensure there is a range of accommodation options available to visitors and volunteers offering affordable pricing, excellent hospitality and value for money.
"Glasgow has a wide range of accommodation to suit all tastes and budgets and is also served by an excellent rail network connecting the city to thousands of accommodation options throughout the Central Belt and within 45 minutes or less of the majority of Games venues."